Inmarsat, a London-based provider of global mobile communications via satellite, reported increases in revenues, profits and earnings per share last year compared with 2001.

Revenues rose 5 percent to $463 million; earnings before interest, taxes, depreciation and amortization (EBITDA) climbed 11 percent to $314 million; and earnings per share soared 165 percent to $1.64. The improved EBITDA performance was largely attributed to increased revenues from high-speed data land-based satellite communication and leased satellite services, supported by strong take-up of new product introductions, lower operating costs and global security revenues, company officials said.

Operating Profits Soars

Group operating profits increased by 46 percent to $184.7 million in 2002, versus $126.8 million in 2001. Net operating costs declined from $154.8 million in 2001 to $149.5 million in 2002.

Roger Rusch, a satellite consultant and president of Palos Verdes, Calif.-based TelAstra, called the results “very impressive.”

Rusch said he has been telling investors to forget about fixed satellite services (FSS) companies, such as PanAmSat [SPOT], Eutelsat and New Skies Satellites [NSK] and invest in Inmarsat instead. An effort is underway for shareholders of Inmarsat, a former intergovernmental satellite organization, to sell their stakes to an investment firm or another company. That process is continuing to unfold.

Standout Performance

“Once again, Inmarsat demonstrates that it has skillfully managed through what is a difficult time for the rest of the satellite industry,” Rusch said. “The management is clear-headed and has outstanding judgment. They have identified mobile data services and provided a unique capability that is precious to users. Their strategic plans and investment are extremely well-matched to the real world.”

Inmarsat President and CEO Michael Storey said that his firm “has achieved a very strong set of results in the face of what has been a difficult year for the satellite and telecommunications industry generally. The fruits of our data strategy are now being realized with a 25 percent increase in data revenues.”

A major component of Inmarsat’s data strategy is its launch of regional broadband global area network (BGAN) service in November 2002, Storey said.

That service provides 144 Kbps of shared IP Internet connectivity from small terminals. The service offers double the speeds of terrestrial GPRS with far greater coverage, he added.

The entire management team – Storey, Chief Financial Officer Ramin Khadem, and other senior executives – is “experienced and prudent,” Rusch said. Khadem singled out the company’s sizable “cash flow” as a sign of its financial strength.

“Ten years ago, many of us thought that Inmarsat would be out of business in five years,” Rusch said. “We were really wrong.”

-Paul Dykewicz

(Roger Rusch, TelAstra Inc., 310-373-1925; Corey Martin, Euro RSCG, 212/699-2783)